Why Savvy Investors LOVE Self-Directed IRAs

Published on February 16, 2023

For self-directed investors, love is always in the air when it comes to their retirement portfolios. These savvy investors understand that the answer to romancing their retirement savings is by opening and funding a self-directed IRA to be used to invest in alternative assets.

Self-directed IRAs enable individuals to include a broad array of nontraditional investments in their retirement plans, using what they already know and understand to build their retirement savings. Account owners enjoy three key benefits as self-directed investors:

• Portfolio diversification by including alternative assets within their plan such as real estate, precious metals, private equity, promissory notes and many more. Self-directed retirement plans are not limited to stocks, bonds, and mutual funds—or investments otherwise found on the public market.
• A hedge against market volatility. The alternative assets these plans allow tend to not correlate with the public market, so even if (or whenever) the stock market takes a dive, the self-directed investments may not be directly affected.
• Better control over investment returns by investing in what they know best. Self-directed investors have the flexibility to take advantage of investment opportunities as they arise (and that they already understand); and the independence from public markets means selecting long-term investments that have the potential to yield more lucrative returns.

Investment flexibility and independence – who doesn’t love that?

Savvy self-directed investors are those who are comfortable making all their own investment decisions, based on the research and due diligence they conduct.

For example:

1. You are already investing in real estate outside of your existing retirement plan, and understand what the world of investment property is all about. Whether you’re into the fix & flip market, rental properties, vacation properties, or have a partnership in a REIT, you could be making those investments within a self-directed IRA, with all the tax advantages that these retirement plans provide.
2. You enjoy investing in mineral rights, music royalties, or agricultural commodities (such as lumber, corn, or soybeans). Bingo! You can make a date with a self-directed retirement plan administrator like Next Generation and start including these alternative assets in a self-directed IRA.
3. Your friend needs an unsecured loan and you have the funds available. Your self-directed IRA can make the loan, with all the terms worked out between you and the borrower, and instructions sent to the plan administrator. You build retirement savings when the money is paid back to the IRA with interest and your friend gets the needed financial assistance.

Getting sweet on self-direction? We can help make the match.

Next Generation provides comprehensive account administration, including transaction support, and holds the assets for our clients’ self-directed IRAs. We also offer a plethora of educational materials so you can learn more at your own pace with our webinars and white papers. If you’re interested in a more coupled approach, you can also schedule a complimentary educational session with a Next Generation representative who will answer your questions about the many options available through these plans, tailored to your specific interest(s). You can always reach us directly by giving us a call at 888.857.8058 or emailing NewAccounts@NextGenerationTrust.com.